Bear Stearns' deal to bail out its High-Grade Structured Credit Fund with a $3.2 billion infusion led to concerns that the second troubled fund was due for a similar parental bailout. While the Bear fund is negotiating with lenders to avoid a collapse of the Bear Stearns High-Grade Structured Credit Enhanced Leveraged Fund, at least one big-name analyst--Guy Moszkowski of Merrill Lynch--has told his clients that he does not expect another big infusion. That would be good news. Moszkowski reiterated his buy recommendation, noting that it is really cheap compared to peers. The bet now would be that the hedge fund ills are contained. There is another view that holds that Bear Stearns might make a good acquisition target right now.
Our take on this news: Tick... tock... tick... tock... tick... tock... waiting for this and other funds to collapse.
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